Common Pitfalls of Bankruptcy in Arizona
For many people filing for bankruptcy is a one-time shot, and occasionally someone who filed in the past might have to file again years or decades later. Bankruptcy is by no means a daily occurrence or something that the general public is too familiar with. The trouble is that because bankruptcy is not so openly discussed or addressed is that people who file often fall into many potential pitfalls.
The common pitfalls of filing for bankruptcy are all entirely avoidable if you understand why you shouldn’t be doing a certain thing. Bankruptcy attorneys in Arizona work with their clients to help explain not only the restrictions that they’re under when filing for bankruptcy, but why those are restrictions in place. They will also help explain how exactly the bankruptcy court will know if you’re faced with any of these complications.
You Have Money in the Bank
Arizona state law for bankruptcy exemption allows an individual to have $300 in their checking or savings account or $600 for married couples. However, you can’t simply take your bank balance is down to that amount the day your filing goes through. For example, if you had $500 in your account, and you withdrew $200 the day before the filing the bankruptcy court would be asking where that $200 went. Not only would they be interested in knowing where the money went, but why it’s not going towards paying the debt.
You can work with an Arizona bankruptcy attorney to explore how to take your bank account to that limit without having questionable cash on hand and without spending in a way that’s going to impact your bankruptcy filing. For example, if you spent $200 on groceries the day before the filing, that would not be treated the same way as pulling the money out as cash to have on hand.
You’re Still Using Credit Cards
Almost anyone who works in personal finance will tell you to stop using your credit cards. It’s very general advice, but when you’re filing for bankruptcy, if you’re still using your credit cards, you could still have debt after you file for bankruptcy. If you took a cash advance within 30 days of your bankruptcy filing going through then, that wouldn’t be eliminated with other debts.
Using credit cards to buy luxury items in the months leading up to the bankruptcy filing is also dodgy. For example, if a month or two before filing for bankruptcy at you purchased a gaming console on a credit card, don’t expect relief for that debt.
Plan Your Bankruptcy Filing Now
It is possible to have a smooth bankruptcy filing and get that genuine fresh start. With chapter 7 or chapter 13, you can arrange to be on a good track to rebuild Financial stability, rebuild your credit, and further down the line, build personal wealth. Getting out from under overwhelming debt is often a necessary step for people to move forward.
Working with an Arizona bankruptcy lawyer can help you avoid common challenges or pitfalls. Having a smooth bankruptcy filing is ideal, and an attorney can help make that process as straightforward as possible.